Occidental Petroleum chairman Ray Irani lost his job Friday after 76% of shareholders opposed his reelection, the latest high-profile executive to be shown the doors.

He won’t be able to collect unemployment but, in this case, getting fired might be the best thing to happen to the longtime oil executive: Irani stands to receive an exit package of over $50 million if his departure is considered a “termination” vs. a merely $20 million package had he retired at the end of 2012, The WSJ reports.

The heft of Irani’s golden parachute adds a bit of absurdity to the excess of his tenure at Occidental: Always among America’s most highest-paid executives, Irani’s total compensation from 2004-2012 totaled over $1.1 billion.

Two years ago, shareholders voted to remove Irani as CEO, in part because of a backlash against his outsized compensation given Occidental shares were lagging major competitors. Scheduled to retire at the end of 2014, Irani sought to install a former executive as CEO, which prompted the latest shareholder revolt. Arguably, it’s also a sign of how the executive had come to believe the company belonged to him vs. other stakeholders, i.e. shareholders, customers, employees and the community at large.

As Henry Blodget and I discuss in the accompanying video, Irani is just one extreme example of the sickness infection corporate America: The Myth of the Irreplaceable Executive.

The myth holds that certain individuals must be paid extravagantly because they and only they have the talent and temperament to guide XYZ company. History has shown that’s almost never the case and the 2008 financial crisis pretty clearly showed these "masters of the universe" are all too human.

The dirty (yet open) secret is C-level executives often serve on the boards of other companies where they vote for outsized pay packages; in turn, compensation consultants then cite those packages as a rationale for paying other CEOs big bucks. To say that it’s very clubby and cliquey*is an understatement.

Even worse, these compensation packages are often tied to specific company performance metrics, giving individual executives huge personal incentives to focus on short-term goals vs. what’s in the company’s best long-term interests. This focus on the short-term – exacerbated by Wall Street’s fixation with quarterly results -- has contributed to the erosion of American industry’s long-term ability to compete in a global economy.

Furthermore, a combination of stagnant wages for median workers and rising CEO pay undermines our democracy and, if left unchecked, is the building blocks for a populist uprising, if not outright revolution. Sound far-fetched? Louis XVI and Marie-Antoinette didn’t see it coming either, much less more recent examples like Hosni Mubarak and other autocratic Arab leaders.

With income inequality continuing to rise, corporate wages hitting all-time lows as a percent of the economy and the ratio of CEO-to-worker pay hitting new heights, it’s a stretch to say the ‘Era of the Imperial Executive’ is ending.
But perhaps the pendulum is finally starting to swing against the C-Suite.

Good for him. You sound envious that it wasn't you able to pull that off.

Anyhow, anyone getting that does not make others poorer. You should be putting that on Bernanke and Obama. That is if you really cared about solving the problem instead of just being jealous.

Not a hard concept to grasp. Money paid to CEOs is money that could have been spent on new workers, new plants, R&D, marketing, training programs. All these things create jobs that create workers.

In many cases, these corporations are getting tremendously favorable tax breaks. Are they getting pumped into capital, workers, etc...? No. Executive compensation is skyrocketing while job growth is flat and the same workers are being asked to take on twice the workload.

Executive compensation is absolutely a problem. I have no problem with good CEOs getting paid handsomely. There is an enormous incentive problem when horrible CEOs are getting paid equally as handsomely.

Not a hard concept to grasp. Money paid to CEOs is money that could have been spent on new workers, new plants, R&D, marketing, training programs. All these things create jobs that create workers.

In many cases, these corporations are getting tremendously favorable tax breaks. Are they getting pumped into capital, workers, etc...? No. Executive compensation is skyrocketing while job growth is flat and the same workers are being asked to take on twice the workload.

Executive compensation is absolutely a problem. I have no problem with good CEOs getting paid handsomely. There is an enormous incentive problem when horrible CEOs are getting paid equally as handsomely.

It's NOT your property. Not a hard concept to grasp either. But for you it is. Therefore, END of discussion with you.

If it's NOT your money, then it's NOT your business. That's what communists and socialists do. Therefore, you are NOT a moderate.

It's not their money either. The CEO didn't start their business and the business belongs to the shareholders, not the CEO. And in most cases, the boards are built by cronies who collude with the executives to work against the shareholder's best interest.

What? Where did I say it was? I not the one complaining about the guy getting all this money. Or that it's getting out of hand. You are.

Quote:

The CEO didn't start their business and the business belongs to the shareholders, not the CEO. And in most cases, the boards are built by cronies who collude with the executives to work against the shareholder's best interest.

Then if you're NOT a shareholder it's NOT yours either. No distinction that means anything here. End of discussion.

It's NOT your property. Not a hard concept to grasp either. But for you it is. Therefore, END of discussion with you.

I do not have a problem with small business owners doing whatever it takes to grow their business or making as much money as they see fit. I don't have a problem with private equity "raiders" who seize a market opportunity and make an insane amount of money off of it.

That's not what's happening here. When small businesses fail, the business owner loses money. When private equity or investors or anybody fails, they lose their shirt on it. When a CEO fails, they get paid and the shareholders are the ones who lose all their money and the company loses the ability to invest that money back into the business.

It is ridiculous to suggest that the corporation is the property of the CEO when they have NOTHING to lose if they fail, except for guarantee of employment.

Furthermore, a combination of stagnant wages for median workers and rising CEO pay undermines our democracy and, if left unchecked, is the building blocks for a populist uprising, if not outright revolution. Sound far-fetched? Louis XVI and Marie-Antoinette didn’t see it coming either, much less more recent examples like Hosni Mubarak and other autocratic Arab leaders.

Look at this crap. Comparing govt officials, in this case monarchs who happened to have inflated their currency to pay for their intervention in the War for Independence in America solely to get back at their competing empire builder Great Britain. ( Our good fortune, but their loss including the king's head.) Then he uses another govt head of state Mubarak and compares both of these leaders as comparable to a business executive who did not stagnate the wages of the common man via inflation because it was a man by the name of Bernanke who did that so a govt leader like Obama can spend like a drunken sailor—not to mention previous American presidents.

Oh and it seems to me the shareholders are dealing with the matter by voting that CEO out.

What's the problem?

It usually takes an act of God for shareholders to vote a CEO out. And in most cases, the CEO has already done damage to the shareholders by the time he is voted out. And other cases, you have boards in cahoots with the executive that don't hold their executives accountable and serve the executives, not the shareholders.

It is an absolutely crooked system. And it needs to change. CEOs can get paid whatever they want, but they should be held accountable for poor performance and there needs to be improvements for how shareholders can more democratically provide a voice to the process. It is absolutely laughable that anyone would applaud a $30M bonus for getting fired.

Look at this crap. Comparing govt officials, in this case monarchs who happened to have inflated their currency to pay for their intervention in the War for Independence in America solely to get back at their competing empire builder Great Britain. ( Our fortunate, their loss including the king's head.) Then he uses another govt head of state Mubarak and compares both of these leaders as comparable to a business executive who did not stagnate the wages of the common man via inflation because it was a man by the name of Bernanke who did that so a govt leader like Obama can spend like a drunken sailor—not to mention previous American presidents.

I don't know why you insist that both Obama/Bernanke and corporations are both a part of the problem, versus insisting that one is the problem and the other is not.

I do not have a problem with small business owners doing whatever it takes to grow their business or making as much money as they see fit. I don't have a problem with private equity "raiders" who seize a market opportunity and make an insane amount of money off of it.

That's not what's happening here. When small businesses fail, the business owner loses money. When private equity or investors or anybody fails, they lose their shirt on it. When a CEO fails, they get paid and the shareholders are the ones who lose all their money and the company loses the ability to invest that money back into the business.

It is ridiculous to suggest that the corporation is the property of the CEO when they have NOTHING to lose if they fail, except for guarantee of employment.

Where did I say it was the CEO's property? You're making a strawman argument—a logical fallacy.
I only said the money or property was not yours, because you're the one whining about the pay he got. LOL

Really, it shouldn't matter if a business is small or big; privately owned or if shareholders own it through shares. The company leadership owes no fiduciary duty whatsoever to the public sphere. This is nonsense common good think from the collectivist trash heaps of history.

I don't know why you insist that both Obama/Bernanke and corporations are both a part of the problem, versus insisting that one is the problem and the other is not.

Because in the case of Bernanke, he runs a hybrid quasi public institution that has been granted a govt charter for a monopoly of the money supply. It was created by govt to enable the govt to spend recklessly. You missed the enabling part which was stated. Or you deliberately ignored it because it doesn't suit the strawman you're making here. I'm ahead of you though. The Fed is not an institution created by any market forces that delivered goods or services that people willing exchanged their money for on a voluntary basis. And it actually really does rape the public while pretending to operate for the public good.

Where did I say it was the CEO's property? You're making a strawman argument—a logical fallacy.
I only said the money or property was not yours, because you're the one whining about the pay he got. LOL

Really, it shouldn't matter if a business is small or big; privately owned or if shareholders own it through shares. The company leadership owes no fiduciary duty whatsoever to the public sphere. This is nonsense common good think from the collectivist trash heaps of history.

Either way, none of it is yours.

The company leadership has a duty to serve the shareholders. That is business 101. The idea that they do not owe any obligation to the millions of investors who are investing into the company is like saying the government has no duty to serve the taxpayers who expect services.

It is not collectivist. If you don't want to be obligated to the shareholders, then take your company private.